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Thursday, February 1, 2007

Increasing Democracy

by J. Mijin Cha

WA: Evergreen State Aims for Clean Elections

Washington State legislators are doing a one-two-three punch to get big money out of election campaigns.  House Bill 1360, Senate Bill 5278  and Senate Bill 5226 were introduced in January to adopt public financing for campaigns. 

The three bills introduced in Washington each have a different focus. 

  • HB 1360 looks to adopt public financing for all state office campaigns.  Under the bill, a Citizens Public Campaign fund would be created in the state treasury to fund candidates. 
  • SB 5278 would eliminate the ban on local jurisdictions establishing public financing programs for local races, allowing local Washington State jurisdictions to follow the trend of cities like Albuquerque, New Mexico and Portland, Oregon that have passed public financing for local races.
  • SB 5526, also known as the Judicial Independence Act, is a voluntary campaign public funding system for appellate judicial positions, including Supreme Court seats and Court of Appeals seats, following the model of North Carolina which adopted clean elections for judicial positions in 2002. 

If the bills pass, Washington would join other clean election states:

  • Arizona and Maine have clean elections for all campaigns. 
  • North Carolina has clean elections for judicial campaigns.
  • New Mexico has clean elections for the Public Regulatory Commission. 
  • New Jersey ran a pilot program in 2005 that must be reauthorized to expand in 2007.   
  • Connecticut's clean election law will come into effect in the 2008 elections.

How It Works:  The way clean elections works is simple: candidates collect a set number of small contributions, usually $5, from people in their district, which qualifies them for public funds to run the rest of their campaign with the amount allotted for campaigns depends on the office sought.   Clean elections candidates won a total of 205 state offices in Arizona (where the governor ran and won on clean elections), Maine and North Carolina in the 2006 election.

With clean elections in 2004, Wanda Bryant became the first African American judge to win election as an Appeal Court judge in North Carolina.  This was followed up in 2006 by Patricia Timmons-Goodson making history as the first African American woman to be elected to the North Carolina Supreme Court.  Judge Bryant states that public financing is a "huge step in enabling more people like myself to run and to feel like you're not going to lose based on not having the money."

The North Carolina program has succeeded in decreasing attorney contributions (the number one special interest contribution to judicial elections) from 40 percent to only 11 percent of total funds.  Four out of the five winning judges were clean election participants both in 2004 and in 2006. 

North Carolina's success with clean elections is not a one-time deal.  Arizona and Maine have had great success with their clean election programs.  In Arizona, 90 legislators, the governor, secretary of state, attorney general, treasurer, superintendent of public instruction, mine inspector and 2 corporation commissioners were all elected as clean election participants.  In Maine, 84 percent of election winners were clean election candidates. 

Clean elections is not only good ethics, but it's a winning issue for candidates.  Voters want clean elections and they will vote for candidates who participate in the program.  Clean elections allows candidates to shift their priorities from fund raising to actually meeting and listening to their constituents.  Because there is a requirement of a certain number of small donors, clean elections give people who can not afford large contributions a voice.    Advocates hope that Washington State legislators will recognize these advantages and enact clean elections this year.

More Resources

Rewarding Work

by Nathan Newman

CO & IA Move to Modify Anti-Union Laws

In the last week, both Iowa's and Colorado's legislatures have moved to modify anti-union laws that undermine the freedom to form unions in those states.  

In 27 states, unions and employers can include as part of a union agreement a provision that all employees benefiting from the higher wages and protections of a labor agreement have to pay fees for the administration of the contract, a so-called "agency fee shop."  As part of the 1947 Taft-Hartley Act, the federal government gave state governments the power to override such collective bargaining agreements and impose "free rider rules" (better known as "right-to-work" provisions) that allow employees to take the higher wages from the union contract, even demand the union sue the employer on their behalf to enforce the contract, yet not pay a dime to the union.

In Colorado, current state law is designed to block agency shop agreements by requiring a 75% vote of employees to approve one.   The state House last week approved HB 1072, which would change the law to allow a simple majority to approve agency agreements without interference by state law.  A Senate committee approved the law this week, making it likely it will soon advance for the Governor's signature. 

Iowa has a more draconian law that prohibits agency shop agreements altogether.  While the legislature is unlikely to overturn the law altogether, Iowa legislative leaders are considering a "fair share" law that would require non-union employees to pay for benefits they receive because of a union contract.  Senate Majority Leader Mike Gronstall says the new law if enacted will require "free loaders...to pay your fair of the dues."

While corporate opponents keep trying to argue that weakening anti-union laws will undermine those states' economies, the reality is that worker pay is nearly 15% lower in "right to work for less" states than in the majority of states where the government doesn't interfere with collective bargaining agreements.   New leadership in Colorado and Iowa hopefully means they will be joining the states with stronger unions and higher pay for their states' workers.

More Resources

Increasing Democracy

Wal-Mart Rips Off Taxpayers by Paying Rent to Itself

In a breaking story today, the Wall Street Journal ($) reports that Wal-Mart has been setting up shell companies to purchase property through a REIT investment vehicle, then renting those buildings to Wal-Mart stores-- allowing the company to deduct the cost of the rent from state taxes in twenty-five states. 

This is just part of the tax loophole strategies used by Wal-Mart that allows it to pay half of the statutory state tax rates over the last decade.  The REIT strategy alone cut Wal-Mart's state taxes by $350 million, or about 20% of its tax bill, over one four-year period.

Luckily, states are working to crackdown on these kinds of loopholes that use multiple shell subsidiaries through a method called "combined reporting," which requires companies to aggregate revenue together from all its subsidaries in a state.  Yesterday, New York's Gov. Eliot Spitzer announced eliminating the loophole as part of his proposed budget, a move that will save the state $83 million per year.  North Carolina tax authorities are also challenging the Wal-Mart REIT strategy, ordering the companry in 2005 to pay $33 million in back taxes, interest and penalties.

Wal-Mart's scam is just part of a larger array of tax loopholes used by corporations to rip off taxpayers, so states definitely need to step in with tools like combined reporting to reduce the tax avoidance games.

More Resources

Research Roundup

Payday lending & alternatives, Reducing health care costs, Election day registration

In Washington State, a Budget & Policy Center brief finds that the concentration of exploitive payday lending storefronts costs low-income state residents $155 million compared to the alternatives increasingly available in other states.  The brief includes maps of where paylend lending outfits are located in legislative districts across the state.

Similarly, Ford Reports outlines some alternatives for Building Financial Assets for low-income people through encouraging the creation of community banking institutions to replace payday lenders and pawnbrokers, while encouraging saving through incentives and promoting home ownership for low-income borrowers.

In Slowing the Growth of U.S. Health Care Expenditures, the Commonwealth Fund outlines options for slowing spending growth through better market information on health costs, reducing insurance administrative overhead, providing better incentives for efficient care, promoting primary care, investing in information technology, and improving access and equity in health care.

Looking at the success of Election Day Registration in the 2006 election, Demos finds that states that allow voters to register to vote on election day consistently boosted turnout rates 10 to 12 percentage rates higher than states without it.

WA: Evergreen State Aims for Clean Elections

HB 1360, Citizens Public Campaign Fund

SB 5278, Eliminate ban on local jurisdictions establishing public financing  

SB 5226, Judicial Independence Act

Washington Public Campaigns: www.washclean.org

Public Campaign: http://www.publicampaign.org/

Common Cause, Public Financing: http://www.commoncause.org/site/pp.asp?c=dkLNK1MQIwG&b=202895

Arizona Clean Elections Institute, Inc.: http://www.azclean.org/

Maine Citizens for Clean Elections: http://www.mainecleanelections.org/

North Carolina Voter for Clean Elections: http://www.ncvce.org/index.php?page=ncjudicialprogram and http://www.ncjudges.org/

New Jersey Citizen Action,Fair and Clean Elections Program  http://www.njcitizenaction.org/cfr.html

CO & IA Move to Modify Anti-Union Laws

CO HB 1072

AFL-CIO, Right to Work for Less

Progressive States, Protecting the Freedom to Form Labor Unions

American Rights At Work, National Right to Work Ties to the Extreme Right-Wing

Wal-Mart Rips Off Taxpayers by Paying Rent to Itself

Progressive States, Reforming the Corporate Income Tax

Institute on Taxation and Economic Policy, Combined Reporting of State Corporate Income Taxes: A Primer

Multistate Tax Commission, Model Statute for Combined Reporting

Eye on the Right

Last November's election held a number of surprises, but perhaps none as surprising as voters in South Dakota decisively rejecting a broad abortion ban referendum by a 12 percent margin. But the rightwing won't take no for an answer and, yesterday, the ban reared it's head, this time with "exceptions" for rape and incest, but only if the woman turns over her aborted fetus for DNA testing and reports the crime to the police. This macabre set of rules would de facto strip away the right to abortion from victimized women too afraid to publicly confront their assailants-- but that's the point, now isn't it?

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The Stateside Dispatch is written and edited by:

Nathan Newman, Policy Director
Mijin Cha, Policy Specialist
Adam Thompson, Policy Specialist
John Bacino, Communications Associate

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Please shoot me an email at jbacino@progressivestates.org if you have feedback, tips, suggestions, criticisms, or nominations for any of our sidebar features.

John Bacino
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